JOB GAINS COULD HELP MORE YOUNG PEOPLE LEAVE THE NEST

This morning’s report showing an unexpected drop in new home building will increase worries about the strength and sustainability of the recovery.  A housing recovery is a key component to the overall recovery, as home building and home buying result in significant job creation; not only in construction, but in consumer goods manufacturing, retail and service sectors.  While the new construction data is certainly disconcerting, observers might be encouraged by one trend that appears to be gaining traction: more young adults finally leaving their parents’ home to live on their own.  As reported by Bloomberg BusinessWeek, the improving job market will help the roughly 20 million adult children currently living with their parents realize their dream of independence. UBS Securities estimates that nearly 1 million new households will be created this year.  And with each new household comes spending on new furniture, new appliances, new drapes and other consumer goods; purchases which further stimulate the economy and lead to more job creation.  How important is housing to the economic recovery?  Where will job creation be the strongest as new households are created?  Will this year’s crop of new graduates be heading back to the nest or is the job market improving enough for them to live on their own?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s